investment, then. >> yes, it is. >> if qe 3 starts, why not qe 4? you're not there? >> i'm not worried about gold yet. >> we will say thank you to you. jim tisch. "squawk on the street" starts right now. tonight is the big night. we've got the first of three presidential debates, an estimated 60 million americans are going to watch. will it be the turning point for the tight race for the white house? good morning. welcome to "squawk on the street." i'm carl quintanilla along with melissa lee and jim cramer. meanwhile, david is at barefoot. >> reporter: good morning. we're down here at barefoot. >> david, we'll talk to you in a

moment. a lot to consider, a lot of data out in the last few moments, including adp, which we will talk about as well. we will see if we add to these gains when we get to manufacturing ism. over in europe, we continue to watch every move out of the prime minister of spain and the first rating agency to take that country's debt to junk status. >> our road map starts with signs of hope in the labor market. days before the september jobs report on friday, could this juice the market ahead of the first presidential debate tonight? >> adp and deutsch deal created the biggest wireless deal behind sprint. >> could the chain jump at a steal with a decade low? >> it's coming. the ipad minuting components rolling off assembly lines in

asia. perhaps just in time for the holiday season. but, first, futures are edging higher after the latest data from adp showed 162,000 private sector jobses. fewer than the following month. the adp number sets the stage for the jobs number which is expected to show nonfarm payroll boosting by 118,000. jim, in the journal today it says, bald is powerful. so you can talk about jobs is whatever you want today. >> take your pick. >> i go to the barber every couple weeks. i've been saying this. look, it's time to get rid of everything. >> really? you want to take it down? >> this article may be the defining point for me. this may be it. 18% more powerful? >> that's a lot. >> how about they gain an inch? this was like the most empirical evidence that it's time to make a switch for me. >> let's talk about adp.

it has run a little hot from january to august. september numbers are encouraging or basically confirms what we already think the job market is doing? >> it's funny. i look at things like housing coming back. and then i come back and say, don't be confused. adp has been a false tale. people get very bullish and come in and you have a weakened number and unless the fed speak after, i'm tempering my enthusiasm, even though i think it makes sense that things could be slightly better. >> re-fis up almost 20%, jim. >> that says something. >> highest since 2009. and a lot of anecdote ta data, discussion from realtors, at least who i know who say the office is getting busy awfully fast. home prices are rising fast. in the first half they have gone

from underwater to positive status. >> what is happening in the bank industry, they are saying, if you get that house to be worth more, we will actually refinance it. they have been very reluctant to re-fi n refinance underwater homes. this piece is very important because you take a wells fargo, 30% of the mortgage market, and everyone knows that they are perfectly willing to give you a job if you have a very good job and 25% down, you are going to get one. they have been reluctant, this is my take, to give you a refinance that is any good if your house is underwater but not if your house is coming back. >> here we're talking about refinancing, positive data points when it comes to the data market, how far we have come in the past four years. >> versus where they are in china, versus where they are in europe. any time you speak positive about the united states, there's a drumbeat, i think, which says,

come on, 8% unemployment, please. so you've got that figure so you are right. but we get a series of downgrades when the market is rallying. >> all of this trouble, all of this. >> houses come back in value, you're going to wish that you owned a bank because the bank is a housing play. >> let's talk about shares of metro pcs. the nation's fourth largest nation carrier, metro pcs merging with t-mobile usa. deutsch telekom will hold 75% of the combined company. the two sides acknowledged that they were in merger talks. the question now is, these are two companies with separate technology standards and this is early similar to sprint and

nextel and what happened with that? i don't know if you can call that a resounding success? >> reporter: no, that is, of course, one of the worst deals of all time, under that unglorious pantheon. but the technology across all of their networks and be a fourth competitor in the wireless business. but we'll see. interesting deal by all measures. many people may be looking at this and saying, well, deutsch telekom has created a currency, they are in a position to finance and capitalize this company but also may have a chance to exit as a result of the selling down of the stake. another story is sprint, as you guys all know, i have reported back in february a deal that was hours away from being completed when sprint's board stepped in

and said, no, we don't want you to buy metro pcs. perhaps it was right to have walked away but still out there in terms of at least a question as we watch consolidation of some kind in wirele but not what many people have anticipated. >> david, first, are you on a horse? >> reporter: i am not on a horse. >> i remember the -- >> that was funny. >> reporter: i am not on a horse, however, the governor of texas sitting down with me shortly told me i have to get some books. >> be thinking cabinet workers when you get together with him. one of the things that's bothered me, david, metro pcs was the best performing stock this last quarter. do you think that this is one of the widely known deals among arbs, among the whisperers? because i thought this was outrageous that this is gone so

far ahead of this deal. >> reporter: let's not forget we reported in february that sprint was hours away from a deal. so metro pcs has been out there for quite some time, at least believed to have been a potential takeover target. there has been conjecture that they might get together themselves. it's been a frequent target of those who might look and say, maybe this is a possibility. normally it was sprint that most people thought they would do this deal. we ended up with deutsch telekon. at that smaller level, we know that at&t prevented from buying in november. >> you mentioned the sprint/nextel deal. that was in 2005 and the companies ran two separate technology networks. in seven years, they only gained 13 million customers. they never have reported an annual profit.

you ask, what has the deal gained them and you wonder -- you see sprint shares trading lower in the premarket but you've got to think maybe this is a good thing for sprint if the other two competitors are tied up trying to merge their networks, spending money to upgrade and create a single network while sprint is left to compete on its own. >> reporter: it's an interesting point, melissa. i'm sure they will argue saying that they will be able to seamlessly do this acquisition. there is also the idea that sprint at some point will find a way to merge with newco. i'm not saying anything that is going on now but it certainly will be out there as a speck laying in years to come. >> that makes kind of sense. the germans want to get rid of this thing any way. the germans clearly -- deutsch telekon did not want this and

are willing to do anything and it's a great thesis. >> again, it might still be a nonstarter. now it's a much larger company and a lot to focus on in wireless today, no doubt about that. >> people already talking about the change in signage that t-mobile will have to do if they go with metropcs. >> they got killed because of the at&t cost. it was a win-win. a lot of people felt that they destroyed the momentum of t-mobile and i was at this conference earlier. those guys hate the at&t guy, the t-mobile almost immediately. it was very intense in the green room. it was really, really intense. there was no joking.

i tried to liven it up. there was no interest. they hated each other. >> speaking of tension, best buy richard schultz is examining the retailers' books which could be the first step to an $11 million buyout. apollo, cerberus, tpg and leonard green are said to be involved. we know that they are going to start doing due diligence and it looks like it may be under way. >> reporter: right. and we know may something by thanksgiving. it was a 60-day period that has begun in terms of the due diligence. jim, somebody really going to step up here? still a big deal, even when he rolls in everything, it's still a very large check he's going to have to write. >> has he shopped there lately?

holy cow. i was trying to give them 1300 bucks this weekend and they wouldn't take it. i was trying to buy a 61-inch. no, we're not shipping it to your address. we're shipping it to your father so therefore it could be identity theft. >> why would i be shipping to a tv to your father and stealing my own identity s. i couldn't convince them. they said, you know what, you're probably his son? and now best buy not accepting my father as a guy who can buy a tv? i mean, what is with pennsylvania? >> you have more drama shopping than i have had in a lifetime of like living. >> you have done more shopping than i have done in my life. in the last week you have done more shopping than i have done in my lifetime. >> i shop on the edge. >> apparently you do. >> this isn't just regular shopping. it's power shopping. >> the question i wonder, david, the new ceo joined the company

last month. does there have to be a level of buy in by management and the board in order to accomplish this? if you're a ceo and just took the job and gave up your other fancy job, you're not going to say yes to a buyout? >> reporter: no, you're not. i think there are board members, i am fairly confident, that would take 23. that would be an interesting conversation. he rolls in their entire stake and get the financing they need. we'll wait and see if that actually occurs but it will be a tough decision for the board. >> yeah, 23 looks pretty good when your stock is at 13. >> circuit city, wow -- >> so many examples. >> right? let's move on to apple. mass production of a new tablet

computer smaller than the current ipad, sources telling dow jones will have a 7.5 inch liquid display. the current ipad, by the way, measures at 9.7 inches. it's a measurement that has not changed since the original ipad. there have been some new rumors about this thing. >> right. >> invitations will be sent out october 10th so it can hit the store shelves. fact of the matter is that competitors with the smaller tablets have been out on the market. when apple comes in, does it not matter what others exist? >> if approximawe can get off t gate, anything to not focus on google maps and the charts are holding up apple. you get the conversation away from google maps, the tstock ma

actually have lift. you have to get it away from that. because right now people are saying, let me get into that samsung line. it's the greatest -- >> and then a difficult story to read, nokia apparently considering selling their 55,000 square foot headquarters in finland, burning the furniture. i don't know if they have reached that point or not. >> it does feel like a citizen cain situation burning there. i don't understand. nokia is literally -- it's like someone called me on "mad money" and said, nok means no. not okay. not okay to buy. i mean, people keep wanting to come in and say, listen, this is the bottom of nokia. one of the major things i learned while working in my hedge fund is that stocks do stop at zero so you may get lucky here.

when we come back, he's known for his winning bet at subprime. what is kyle bass betting now? especially about japan? and we'll talk to david faber at the barefoot economic summit in texas. then -- >> cuff links, gold ones. >> not on our watch. >> lifelock kicking off a big week for ipos. we'll bring you the opening trade and talk to the ceo about his company's wall street debut. and take a look at futures as we head to this wednesday's opening. a positive day at the open. straight ahead.

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"the wall street journal" reporting that bald men have the advantage in business according to a recent study at pennsylvania university. men with shaved heads have more leadership compared to those with long or thinning hair. what do the bald bosses know that we don't? we'll air your responses throughout this morning.

@squawkstreet. >> the fact that he was the supreme commander and president, not enough. he should have shaved his head. >> both of the candidates tonight have full hair. nice hair. >> the distinction is between bruce willis who might have been thinning and shaved and george castanza who had no hair. >> and michael jordan -- you tweeted it very early and i found myself thinking, all right, all right. go for it. go for it. >> you should just take it all off. >> it could be a ratings bonanza. we could do it on air. >> carl, you should shave my head. >> i would be up for that. >> i think we ought to do it. do it for charity. it's not like we could make a rug with it. >> you might want someone to

straighten it up after i'm done. >> if they have the advantage in business, will they lose advantage in other things in life, like perhaps love? >> wait until you hear what cramer has to say about one stock in particular. find out if he's giving it a thumb's up or down. and the international director of michelin's best of the best. we'll see how we open in just a few. tridion safety celly which can withstand over three and a half tons. small in size. big on safety. which can withstand over three and a half tons. why they're always there to talk. i love you, james. don't you love me? i'm a robot.

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all right. a few minutes before opening bell on a wednesday, let's hit cramer's mad dash ahead of the open. watching monsanto, a stock you've been watching for a long time. >> this was a disappointing number. this is the biotech of ag. this is the celgene of ag. people are getting negative on this. >> you talked mosaic last night as well. >> the ceo was on and i liked it but he was not saying pound on the table. they have a very interesting move in may that they can do to start buying back stock. they are locked in right now. but monsanto on the dip i think

is buyable. >> you talked costco last night. there have been some analysts that have missed a run. you think in the end they might be right at this point? >> i've got to hold back here. here's the problem. we know there's a negative analyst out there. we know if these guys don't exceed the numbers -- by the way, you remember costco tvs. they don't like to raise price. on your great documentary you talked about that. >> b of a is positive. >> i'm just scared. i think it's such a big run if they miss out versus family dollar which didn't really do that great but expectations are so low it's going up. >> serial disappointor. >> when we come back, kyle bass is going to give us his assessment of the global economy. faber will have a live interview. plus, inside the metropcs

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all right. welcome back to "squawk on the street." the opening bell is set to ring in a minute's time. big day shaping up. of course, the presidential debate tonight. our coverage begins on cnbc. also working right through a lot of data. adp coming in better than expected. construction is the highest since march. >> yes, we are beginning to see the real estate starting to talk about the need to build. we really didn't have any need to build because everything got so overbuilt in this country. the steel industry has been so horrendous. here at the big board,

lifelock celebrating its ipo today and the maker of chocolate is celebrating. >> this is the -- if you want an analog, this is philip morris p.m. versus the old north american grocery which would be altria. the yield is quite good and keeps you in.

they are looking to grow the business. >> of course, alcoa, kicks off on tuesday. an interesting note yesterday, of the preannouncement, four out of five. don't fight the fed dynamic. >> some of them are secular concerns. some of them are international fedex. a lot of the other transports are not. but i do want to say this. he has done everything he can be to make fantastic bottles for soda he to making the skin of the ipad. in the end, he is still hostage to currency, to the inventory of alum nam and high cost and high

pollution in order to get people to work. what a tough job he has. >> yeah. >> funny guy. >> east german, terrific sense of humor. >> taking a look at fdf, family dollar, i didn't expect a pop of 2 1/2%. their outlook for the first quarter was cautious. the range, high end of that range and same-store sales growth of 4%. consumables is just food. it's a lower margin business. >> i, too, was surprised. and when i visit my family dollar, i'm always happy to see that they have a terrific cooler. now, they have the freshest food that you would -- i still like dollar tree more because they have a better candy aisle.

>> we're also keeping track of the rails. bernstein upgrading to a market perform csx as well as norfolk southern. they are actually catching a decent bid for both of them. >> very important that norfolk hold the level. that's where we initially dropped and it got killed again, so to speak, when the transports had another leg down. the fact that it's holding at 65, 3% could bode well for the transports which you talk about a lot and i know it's so important. you always want to say, listen, it's different this time. every time i try to dismiss off of coal, i end up getting whacked upside the head. >> components are being manufactured right now for a smaller ipad. here's an interesting note in terms of apple performance. if you take a look at 2003

through 20111, apple actually performs very well in the month of october. historically a very strong month. the stock, on average, was up 10% from the prior one. i don't know if it's setting up or if apple is going to buck history this time around. >> i continue to think that if you can just get apple off the front pages for its gaffe and for something new and original, we're going to stop thinking about firing tim cook. i love that. steve jobs would fire tim cook. he would fire everyone involved in maps and he would berate them in front of everyone. he was not a nice man and yet everyone loved him anyway. >> lifelock posted a little below the range. maybe a little disappointment

there. i might be able to see that. certainly one that we're going to watch, a big week for ipos, of course, one of the busiest. berry plastics tomorrow and pretty sizeable deals. >> and one of the things that we need to see is some pulse down here. there was a lot of social media, people got gaffed. any time you see new companies, you think, maybe i should stop shorting goldman sachs and maybe there is a sign of capital formation. p excellent show stopper yesterday. and mark cuban was so great and the destruction of the capital markets. cuban, cooperman, these guys are not idle thinkers. they are the best we have. and high frequency trading has

destroyed a lot. >> and suggesting you tax intraday trades 50%, trades less than a minute, 100%, that would cut down on it in a hurry. >> no one wants to put the genie this the bottle, meaning financial engineering. the s.e.c. has been disgraceful. it's almost like when the interstate commerce came in, completely owned by the refs. like a cuban, like a cooperman, and they are not going to because i think they are captured. >> all right. let's check on bob pisani. i think he may be in that crowd of lifelock. >> yes, we are right here. the ceo is right here behind me. it's still a little early. i think we have a few moments before it's going to open.

price talk is well above that. let me talk about where the markets are because a lot of chatter about the fact that the markets look like they are stalled and kind of running out of steam. there's been a lot of talk that we've had the positive ism. market is not doing much. obviously the question is about the spanish aid request. that moves the markets around on an intraday basis. a lot of people trying to position oh themselves for the end of the year. that's kind of what is going on here. most of the people i talked to were eager to see it drop a bit but because they wanted to see it buy more at lower prices. this is the race to the finish line. this is the fourth quarter. a lot of mutual funds and a lot of hedge funds are notably underperforming their bempbl marks th marks. in terms of what is going to happen, it's possible that you could see a 10% correction. nobody is going to rule that out. but if europe continues on a relatively smooth path, most

traders i talked to think the most likely events is a 3 to 5% correction, so the market goes to 1375 to 1400 and that's when you get buyers starting to come in to try to play a little bit of catchup. that's the most likely thing. that's where i'm at personally. how about the ipo situation? two of them priced below the range. one of them priced at the range. now, normally you would say, that's disappointing, isn't it? two out of three prices above the range? i talked to david menlo about this. we're in a post facebook world now. it's not about maximizing the price so much, it's about getting it right towards the open. goldman did this deal, talking about what is going on. lifelock priced 15.7 million shares at $9. the price was $9.50 to $11.50. goldman priced it at $9.

certainly it's a more realistic price and it's more about getting it right initially and at least getting other people to come in later on than making the maximum amount of money for the company, at least this time. that's certainly the trend that i'm seeing for ipos right now. 8.25 right now. the ceo is going to be here with us at 11:00. this is the ceo that famously put its name on the side of the truck. encouraged everybody to see if they could break in and steal its identity. talking about the outcome of that at 11:00. >> here i get excited about more deals. bob said it correctly by saying they are duds. okay. let's go to the bond market. maybe they are not duds. rick santelli, go ahead.

>> indeed there was volatility. we can look at the charts. if you look at a 24-hour chart, right around 8:15, volatility and it looked like rates wanted to do better. it moved back down and we're pretty much right where we've been for the last five days on a closing basis below 160. maybe more volatility, a lot more on their plate potentially. now, if we switch gears a bit and look at the dollar index, the dollar index definitely like the s&p futures, it held on to some of its trends from adp dollar index moving a bit higher. let's look at the components that are moving. we talked about how export companies are getting nervous as china and europe seem to be slowing. if you look at the dollar yen, it's improving. the japanese and ministry finance are happy about that

because it bounced off of seven-month lows established on september 13th and retested several sessions ago. here's a chart going back to july 1st on the ozzy. two days in a world, the aussie is deteriorating a little bit. 102 with the last couple of bottom, it's a key support to pay attention to. maybe next stop is parity. never know. carl, back to you. >> rick santelli, thanks, in chicago. one thing we haven't talked about is einhorn's conversation yesterday. he did move some names yesterday. >> gm is tough for me because the numbers are obviously dismal. chipotle has been on "mad money" many, many times. when i asked directly the cfo is

yum hurting them, this is the revitalized novack-led taco bell. he says they are there for an inexpensive meal, let's not call it naturally organic, and there's no real overlap. don't really care about whether yum is taking shares or not. chipotle is expensive. if they don't shape up, the sto back to where it was. >> update from hewlett-packard, up almost 1%. ceo meg whitman expected to perhaps outline a strategy for the company, what she sees ahead. we'll monitor the headlines. right now it's an update at least for shares of hugh let. >> i'm not a buyer, dell, hewlett-packard, these are just -- these are just data general. >> is there a possibility of

financially engineering a turnaround in hewlett-packard? that idea was floated around by isi a couple of weeks ago, splitting into the higher growth business and then personal business which is printers and other devices. >> anything is possible. bonds were getting hit. the notes were getting hit. i feel that, again, this is just it's not a titanic because that is way too negative. but a no growth situation. it's not kodak but it is not google. >> right. it's funny. we had on yesterday, adding incremental jobses, north carolina, and asked him to defend the pc case. it was the same argument moving into a multidevice world and she's going to have to say something a lot more creative than that if she's going to make

the cases for pcs. >> i think she's got a very big job and i just don't think that it's going to happen. steve jobs on his death bed talked about what hul let and pack card had built versus what it became and you can't undoll that undo that in a year's time. >> lifelock, we are waiting for them to start trading. plus a live interview with the ceo. >> the third agency of government, i would do away with the education, the -- commerce and, let's see, i can't. the third one, i can't. sorry. oops. >> hear what texas governor rick

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the ceo being hugged behind me. he'll be on with us at 11:00. mr. davis is famous for putting his number on a social security truck. guys, back to you. >> we'll find out if that hug is celebration or solace. it's a long trading day. we don't know how it's going to end yet. >> that's as much as a full dollar below the low end of the original range. >> trying to position a company, a technology company is more of a consumer company in a world where obviously this is a lot of bank happy and you would think that there is more demand. i'm a little surprised about this. >> there was a lot of discussion this morning about what the price here was and, remember,

9:9 9.50 to $11.50, this is a much more disapointment. they are not opening at $9. clearly you can argue they are trying to get more realistic with the pricing, given the demand structure. >> 2.3 million subs are paying, what, $10.25 a month for services. they have not reported a profit for four of the past four quarters. >> and trying to keep the operating base up, you have to spend money to make money. >> yeah, it's funny, i have a guy in the for example industry that swears by this. again, sometimes i miss it. i was going to feature this on "mad money" and i got the word, be careful, this is not going to

be a hot deal and just backed away from it. at a certain price -- well, everything at a certain price. there's always a price. >> in the meantime, lifelock leading the pack for the company's debut a few moments ago and the ceo won't pay a visit to post 9. we'll have that live interview coming up. but, first -- >> announcer: coming up, we're all artists in some capacity. some bigger than others. cramer's talent lies in the market. and he'll show it up with six stocks in 60 seconds when "squawk on the street" returns.

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microsoft. >> ubs boosting on gilead? >> i think it will go much higher. >> and priceline? >> priceline had lost its luster. it's coming right back. they never seem to die. >> want to draw your attention to kfrt to 58 or 54, something like that. it could be an erroneous trade. >> it didn't adjust properly yesterday. this is a catchup. this is going to be a big secret and kept from you. it doesn't work like that in this market. >> here's a look an intraday?

>> i think the stock goes higher and it's the right push. i think these things happen, carl, and nobody cares. it just kind of happens. too bad. i blame him and he blames them. there's never a straight story because high frequency trading controls. >> they are in charge. >> what's tonight? >> vf corp, a company that just came back from china, one of the great ceos in this country, looking forward to seeing him. >> when we come back, after a short break, we'll talk about the presidential debate tonight and a lot more as we continue to watch ipos here at the big board. back in a minute.

. >> announcer: today on the close bell, joe torre beginning at 3:00 p.m. eastern on cnbc. welcome back to "squawk on the street." we're going to have some good data momentarily. nonmanufacturing. the service sector, the bigger part of the economy. this september number we're expecting, basically a lateral move. 53.7 was our last look and we're also coming off of several other

data points. adp was better than expected at 162. high ironic, we stripped away last month's revision. we could argue about the fed in qe 3 but initially re-fis have popped and we're waiting for it, the markets are moving a little bit. equities are 55.1. they've had it. they started to rally. much better than expected. much better than our last look and it's the best number going back to march. march when you had a number of 56.0. we've pretty much taken away the down on equities and we've moved the basis point higher on tens to a middle of five-basis point closing range over the last week and that is at 163. melissa lee, back to you. >> thank you very much, rick santelli. slight pop in the equity market.

steve? >> really interesting number here. rick said stronger than expected along with the ism manufacturing number. the business activity number, up to a very strong 59.9. right now i'm talking about some of the subindices inside this number. the new orders index also popping. 57.7. that's a good sign for the future. on the other thing, the other thing that we're talking about, jobs, jobs, and jobs again, ticking down to 51.8 shows growth in the service sector as we get to the adp number but not as a strong level as has been there before. the backlog of orders was down, investors down a little bit. but good number for economic activity. speaking of employment, here's the problem. as you can see, adp has been

kind of overshooting this year to a point where economists are wary and are trying to build this into their forecast. i'm not seeing a lot of economists upgrade. let's look at the misses over the past several months here. over the past three month, adp has been high. past six months, year to date, it's a better performance by the adp indicator. the government is going to revive up its numbers. the 21 and 12,000 could be removed. as of late, adp has been running heavy. what we're looking at for tomorrow, which is 118,000 on the private sector numbers and that comes after 162 today. the 118 is the government plus the private sector and adp is private sector at 162. the government has been losing jobs. we can argue about the thousands

here, 1,000 here, 10,000 there, the economy has been growing at 1.5 to 2%. in the 150, 160,000 range. the better argument for the future would be one where we're arguing over 250 versus 150. >> steve, you know what i find fascinating? it seems as though we just keep shaving the curve a bit when data is doing better several months ago. we were too optimistic. when data started to do reversals of late, maybe we were too pessimistic. we're in the middle zone. 162,000, it might be better than they were expecting. currently on jobses we've averaged a smidgen for the third quarter. i guess in the end the numbers give me confidence because it is a bigger part of the economy. but none of this is to write

home about on the recession side. >> my perspective is i'm afraid we're falling off a cliff. the ism numbers don't tell us that. it shows that we're in a modest area and recession is not around the corner. but let's say your test is putting millions back to work and those who say they are working part time for economic reason. in other words, they want a full-time job. 130 is your baseline for putting those entering the workforce back to work and let's say that leaves 30,000 against a pool of ten of millions. so we're not doing good there. doing good is a recession. doing not so great if the test is putting those unemployed back to work. >> 3% handles on gdp. >> and i know we've got to go

but that's really the right back to look at it. you have to generate the growth to put the people back to work. it's not the other way around. you don't put the people back to work and -- you have orders coming in the door, you have business, then business has confidence to hire people and as a result of the growth number. that's why we focus on gdp so much. >> it's growth, growth, growth which equals jobs, jobs, jobs. >> wouldn't you guys agree -- >> it's heartwarming. >> guys, thank you so much. steve, rick santelli. now that we've gone through that data, we've got a deal. metropcs and deutsch telekon forming the fourth largest company next to sprint. >> get your cowboy boots ready. david faber is at the barefoot economic summit. he'll have an exclusive with the manmade famous for the bet

against subprime. kyle bass. what is his next big prediction. >> and they say the apple ipad mini is coming. what might this mean for amazon and google? >> and weapon wae want to touch kraft here. take a look at that spike there. just at the moment. 58-54 is the level to which that move spiked. it wasn't properly adjusted for at the close yesterday and there's some adjustment period. that was obviously a trade that was an outliar trade. 58.54 is the new high. and the higher growth aspect for the yum brand and it's a phillip-morris side of the

business. kraft is more of the -- >> gum. snack and gum. >> no. i like gum. who doesn't. and biscuits. what's not to like? back to politics now. president obama's lead has narrowed heading into tonight's big debate. john harwood is in denver getting ready for the big event. john? >> reporter: melissa, we've got several pieces of encouraging news for mitt romney from not only the wall street poll but swing states poll. you mentioned that mitt romney's closed the deficit among likely voters for obama from five points to three points. and in florida, he's closed from five down to one which is tied given the margin of error in our poll. in virginia, he has closed the

gap from five to two. if you look at the state of ohio, a must-win state for mitt romney, mathematically possible for him to get to it without it but his strategists think he needs it. he needs to make progress there. but the fact that some of the national polls are coming back a little bit, some of the swing state polls are tightening, is a bit of an earn couragement for romney that he still has an opportunity for deficit with three or four points to change the dynamic in some way. he's got to hope that obama is not on his best game. you could have a scenario that like what happened in 2000 where george w. bush moved significantly without gore and ultimately became president. >> it's interesting that the poll also shows, as you mention, this 12% of swingable votes in the middle that he could potentially get a hold of.

also ensuring that the big money continues to back him moving forward and doesn't decide to switch perhaps for the congressional votes and ensuring that there's a better showing in the house, for example. >> reporter: you know, if i were the romney campaign, simon, i've got multiple things to worry about. that would be one of the least things that i have to worry about. what he's got to do more than anything else is get the share up among women. he tried to do that at the convention. he needs to do it right now. especially white college-educated women. mitt romney has got to get about 60% of the white vote. he's fine among white men to get there but needs to do better among white women, especially upscale suburban white women, the kind that turned away from him on some social issues and the role of government. that's the opening for him and

he's got to cease it. >> coverage of the first presidential debate begins at 8:00 p.m. eastern time here on cnbc. carl quintanilla, maria, and others will be hosting that. >> shares are down of metropcs. making it the fourth largest wireless company behind sprint. so often left out in the cold. what is next for sprint on hopes of the user base? we're joined by jim, an analyst. thank you for joining us. >> good morning. >> as we get the details coming in, it's a reverse merger. deutsch gets the debt, $15 billion of debt and you've got $1.5 billion in cash that goes to metro pcs. is anything different than you were anticipating coming into

today? >> no, not especially from things that came out. the speed of the deal coming out was probably a little bit faster in terms of the whole wireless landscape. once the at&t and t-mobile deal fell apart, the carriers were stuck in terms of trading spectrum and trying to shore up their spectrum position. i thought we were off but this kicks it off as t-mobile is looking to get aggressive. >> there are obvious implications for sprint. we'll talk about that in a moment. what is the objective for germans? is this a way of them exiting the u.s. market by basically floating the new business on the stock exchange through a reverse merger? are they going to pay that down? >> i don't cover t-mobile so it's hard for me to comment on them. they've recently completed a deal to sell their towers and

they've got cash from the failed at&t deal. it looks like they are really trying to bolster their position from several quarters that they have been losing to subscribers. they are trying to shore up their position in the u.s. >> jim, do you think that the companies are being overly optimistic about their ability to merge the two different network technologies that they have? we saw the nextel merger which could be considered one of the worst, you know, mergers in the books. >> right. >> in this industry. >> it's a little bit of a different -- a little bit of a hard comparison because it was different and the one commonality that you do have is metropcs was one of the first mergers to launch lt. t-mobile is behind there in terms of rolling out lt. i think it will be difficult to merge those technologies but

this this will provide a jump-start. >> could oh this be a positive as these two other competitors are tied up making that merger work? >> yeah. typically you do see that. you see a weaker entity and tend to take your eye off the ball when you are merging the wireless sectors. carriers get caught up. and you tend to lose subscribers as it's a lot of complicated in terms of integrating billing systems and things like that and customer support. that gets messy. yes, sometimes you can lose subscribers and other carriers can target the subscribers while it's going on. there is an opportunity there. in terms of sprint, i continue to be positive on them. i think they are focused on completing their network vision. they are one of the biggest carriers in the prepaid and they have access to the iphone which metropcs nor t-mobile has the

iphone right now. >> i have a buy opinion on leap. i think leap is attractive. they have been turning around the operations to have the iphone. they recently launched the iphone 5 and i think it's doing quite well. you have a company really starting to focus on costs and cutting costs and focusing on free cash flow. as they do that, it makes them more attractive as a consolidation candidate. >> that's a big call and $11 price target on leap fortunately where we are now. >> right. it is. >> almost double if i saw the last chart correctly. good to see you, jim. thank you for your analysis on t-mobile finally doing the deal with metropcs. >> hi, courtney. >> good morning, carl. to say that shares are soaring is an understatement.

shares up 153%. positive drug data. they are working to treat a certain type of muscular dystrophy. as you can see, shares are really soaring. we're going to have to keep watching this one. still 155% higher. carl, back to you. >> we should mention as well, on "mad money" tonight, that's what you call a one-day gain. when we come back, the euro teetering as talks of a spanish bailout. currency experts will weigh into that. still to come, the hedge fund manager known for his winning bet against subprime and now he's taking on japan. he's talking exclusively to our own david faber in texas. >> announcer: these markets can be just as unpredictable as the weather. this month, don't get caught in the rain being unprepared. and one way to do that, carry an

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want to draw your attention very quickly to kfrt. trades executed between 9:30 and 9:31 a.m. this morning, they will advise with details. it does appear to be erroneous transactions. >> i think the market is expecting nothing from the ecb tomorrow. i think at the last meeting they gave us with regards to stabilizing the sovereign bond

market indicating that they would be there to support the market. we've also seen a lot of progress with regards to discussions about fiscal unions and that sort of thing. so i think the market is not expecting anything new from the ecb. >> willy, you are recommending selling euro/u.s. dollar. does that mean you're expecting a stronger number to be printed? >> i think we're expecting around 100,000. at that rate, it's pretty consistent with the fed continuing to purchase treasuries throughout 2013. i think the negative story on the euro is more about what is happening in euro. the recent disappointment in the pmis, slow down that is starting to move into the core companies and not just the periphery and some of the developments with regard to spain, not asking for a bailout as of yet. so with that said, i like selling the euro around 1.29 and a target of 1.25.

>> there are reports, of course, that spain could ask for a bailout. are we in this period where you don't want to have a long-term position? >> i think for the most part i am comfortable holding a position over the weekend. spain most likely will not ask for a bailout until around october 21st, after the elections. i think that's generally the market's consensus. anything before then would be a surprise. however, considering the spain has to make, i think they will wait until october 21st. >> willy, thank you. >> thank you. >> for more currency trades, catch "money in motion" on cnbc at 5:30 p.m. and go to currency

class. >> the euro will bounce substantially on that. >> i would agree with him in terms of the trader perspective in believing that it's a key date. >> it's a huge event risk. >> we'll see. ipad mini rumors beginning in ash na. >> first, before david faber talks to kyle bass, at the economic summit in texas, someone who knows how important debates can be, texas governor and former gop candidate rick perry will join us on cnbc.

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governor of the state of texas where we are for the economic summit. had a chance to speak briefly with the governor who visited briefly here as well. we did talk about tonight's debate but we also talked about what is a power problem here in the state of problem. it is in some ways a high-class problem because they've had a lot of growth in texas. a lot of businesses, as the governor has pointed out, have moved to texas. but they are running out of power. make no mistake about it. the low price of natural gas has really been a reason why you haven't seen a lot of new independent power producers come into the state and build new plants. the question is, are you going to go with the free market who says we're not going to build new plants because we're not going to get paid for it or do to a capacity market because they are getting close to real problems here in the state of texas. here's what the governor had to

say. >> i think that you will see probably in the next very short foresheable future, and what i mean by that, a clear plan, incentives that we're going to put in place for the industry to build and know that they can have the return on the investment that they are going to need. coal, nuclear, whatever you can build to create a very diverse portfolio i think is very important. >> but in terms of which plan he's going to back, in terms of whether he says incentives in the free market are going to work here and whether you're going to have to go to a capacity type of program, the governor would not commit. there are a number of investors and txu bank loans and other players here in the state of texas in the energy business, that investors are very focused on, it's a three-member utility commission that is going to make that decision. they are appointed by the

governor. big debate between the president and his republican challenger, mitt romney. it wasn't that long ago that rick perry was one of the challengers for the republican nomination for president. i asked him what he thinks romney is going to do tonight and how he is going to do in tonight's debate. >> this president has to defend the debt that's being created and i think governor romney's going to do a very good job of one of growth, of one of allowing the states to be more engaged in policies. >> reporter: so, of course, he thinks romney is going to do good tonight. is he partisan, no doubt about that. we'll see how it plays out. >> david, i understand that you're still going to talk to kyle bass in a few minutes. what is top of questions in your mind? >> kyle is a big macro thinker. he also runs a hedge fund that

makes stock picks like everybody else. we're also going to talk about, first off, the growing debt world we're going to talk about that and might talk about stock runs in about ten minutes from now. >> all right. thank you very much, david faber. >> "the wall street journal" that bald men have an advantage. the study finds that men with shaved heads, like these guys, are perceived to be more dominant, taller, stronger, and in some cases greater leadership. >> but they have natural baldness. there's a difference. >> compared to men that have long or thinning hair. that brings us to this morning's "squawk on the street," of course, what do the bald bosses know that we don't. tweet us @squawkstreet.

spell out the word street. >> we talked about it with cramer and he thinks he may get his head shaved. >> wow. >> he may do it. let's go to sharon epperson, oil investors hitting right about now, sharon? >> hitting right now as we talk about where supplies stand and 5,000 barrels in the past week, crude supplies fell by 5,000 barrels in the past week. we were expecting to see an increase of 1.5 million barrels. this is a big surprise. we're seeing a change from where we had from the american petroleum institute and crude supplies. we're looking at gas and supplies that are up by 100,000 barrels. gas and supplies and down by 3.7 million barrels, we were expecting to see a slide but not by nearly that much.

expectation is around 400 barrels. off the lows of the session, still down more than $2. we're below $90 a barrel here for crude oil. influencing the oil market, more so perhaps than the inventory data, particularly when we're talking about the brent crude data. and that's the information that we're getting from china and pmi. definitely disappointing and the growth prospects there and even though some of that support that folks talk about the geopolitical risk with iran, that is not lending the support as we're below very key technical levels in both the brent crude market and wti market. back to you guys. >> thank you, sharon epperson. at the opening of trading, still to come, you just heard david faber, he's going to talk with

kyle bass at the economic summit in texas. and the world's only tridion safety cell which can withstand over three and a half tons. small in size. big on safety.

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high. and british publishing conglomerate pearson stepping down after 16 years on the job. she will be replaced by john fallon who has been in charge of the pearson education businesses outside of the u.s. >> which means they may sell the financial times. it could go to reuters or bloomberg. >> that's a great angle to that story. in the meantime, kraft showing an unusual open. bertha coombs has more on this. bertha? >> we're getting word that pursuant to rules, they are -- i'm reading off the screen here, they have determined to cancel trades in kraft food groups at or above 47.82 that were executed on nasdaq between 9:30

and 9:31. kraft spiked to 58.54 in what appears to be erroneous trades. as of today's split into two companies. mondalez handing out not just gum but oreos as well. mondalez is trading and it's up. again, some of those erroneous trades from kraft foods has been taken back above 47.82. back to you guys. >> it's an interesting decision, whether you cancel trades or not. they didn't with nightcapal.

maybe they will cancel them. >> that's what they do. traders said that's an unusual spike to see on kraft. >> bertha, thank you very much. according to the weak data, there's a prominent slow down in demands for apartments since the recovery demand back in early 2010. diana olick has the details on that. is is this rental demand? >> reporter: absolutely, simon. it's a red flag for the red hot apartment sectors. vacancies are still dropping. now at the smallest rate in over two years. take a look at the trend. apartment vacancies have been dropping at an average of 35 basis points. in q 16th yein q1 of this year, from recent economists, there is

cause for concern in the near term that demand is abating for multifamily. avalanche of new products begin to open their doors early next year. now, as we know, multifamily housing starts have surged 30% from a year ago as developers rush to meet this new demand, between 160,000 and 200,000 new units will open in the 79 markets it tracks. in 2014 that could exceed 21,000. rents are still gaining moderately. you've got to ask about apartment reits. they have already been underperforming because investors expected 2012 to be the peak. when you look at other sectors next year, he says that will bring investors back to apartments. why did we see the demand drop off? the housing is improving and single family rentals may be

pulling away from the multifamily sector. plenty more of that on the blog. >> goldman has a report out overnight, they are forecasting over the next two years house prices across america will rise, on average, 4.8%. and possibly that house prices over the next two years could rise more than 9%. that's astounding. >> reporter: that's what a lot of people are predicting. they are talking big rebounds. you have to think about where we have come, over 30% from the peak of the housing market. to see prices jump back up, that's a good thing. a lot of us this is on the low end where we saw distressed properties and demand for investors. bullish going into next year. >> diana, thank you. >> a market flash, this time in the fertilizer space. >> thank you, carl. taking a look at monsanto, the world's largest seed company.

most of the year we've seen pretty nice movement out of the shares year to date. monsanto shares up 25% because the business has been pretty strong. carl, back to you. >> court, thank you so much. after the break, david faber's interview with kyle bass from the barefoot economic summit in texas. do not go away. >> announcer: with an identity thief able to use your information to open a bank account in order to make your money his money. you need lifelock, the only identity theft protection company that identifies takeover fraud. lifelock, [ male announcer ] how do you trade? with scottrader streaming quotes, any way you want. fully customize it for your trading process -- from thought to trade, on every screen. and all in real time. which makes it just like having your own trading floor,

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. our own david faber is in larue, texas. investors are convening to discuss all kinds of issues. david, i see the jacket is on. take it away. >> reporter: jack ket is on because it's so bright out and i had a white shirt on. it's a magnificent day here. one of our hosts is kyle bass. thank you for having us, as always. >> sure. >> and you and i are going to start off where we start many of our interviews, mainly talking about debt balances throughout the world. deleveraging has been taking place around the world. in fact, you hear about it, the deleveraging the economy. that's not the case, right? >> we try to look at the world

in its totality and when you look at on balance sheet corporate debt, they've grown from $80 trillion, 11% growth rate when you have a population growth of 1.2, realty gdp growth of 3.8 and debt growth of about 11. central bank balance sheet of 16. you can't just do this for very long. what you're seeing is leveraging on the government side. you're seeing central banks that are starting to do open-ended money printing. so it makes it difficult. >> you're looking now at the sort of further end of this chart. we didn't have it all in one. global oh population, real gdp, 10% global credit increase in that and then central bank is printing money. everybody printing money. you and i have been having this conversation for years and it doesn't appear that things have

gone off the rails yet. even europe is somehow staying together. >> i guess it's perceived to be saying together. 90% of your money and now you have owning the greek debt. that's going to have to get wiped out as well. you will still see what they need to do because certainly german economy benefits from the europe. >> extended family? >> maybe not. >> so imagine 17 nations that have basically been fighting for the last 200 years agreeing to seed their sovereignty to a higher power. it boils down to something more simple that it can't happen. when you look at global debt balances, the world and

interesting adjective and historically what has happened, when you get to 250%, credit market debt, historically two sides of deficit spending going to a war and winner goes the spoils and losers go to defeat and default. the reason it's so difficult for us to understand what the playbook looks like going forward, we never did hear before. >> we're starting to see debt inflation. >> think about it, we had a hyper-levered economy and world going into the financial crisis. we lost trillions and trillions of dollars because of that leverage. the first trillion were replacing what was lost. and the subsequent printing and when you think about what we're seeing in southern europe, much higher than expected and gdp prints much lower than expected so you're seeing this cost push type of inflation push-up. >> debasing their own buying

power at the end of the day? >> it takes time. >> it certainly does take time. you and i are going to be sitting here next year and the year after that having the same conversation? >> i hope so. i hope things are not going to fall off the rails as much as they could. >> do you think they could? >> yeah. i've spent enough time in d.c. they all shake their heads when you talk about debt sustainability and you leave and nothing happens. nothing changes. this fiscal cliff is not going to happen. they are going to vote it down the road another year. sequestration never works. it's fairly easy to see what is going to happen. how do you invest around that? >> what do you do? they don't want any parts of equity. they know that you've made coaching arguments and have been largely right directionally with what is going on but they wonder, where do i put my money?

what do you tell them? >> we have more than half of our portfolio in bonds, believe it or not. >> the things that created and made your name, let's face it, in terms of being short that market. so now you're long a lot of residential mortgage-backed securities? >> right. we own about 1% of the market. we have a large investment in that marketplace. basically i think the u.s. housing markets played out. it's about 6.25 years and we're 6.50 years in our cycle. i think housing is going to flatten out. that makes housing affordable as it can possibly be. we don't think housing is going to go up at any point in time in the near future. >> you don't? >> it's not going to go down anymore. >> why won't it go up? there seems to be signs that prices are starting to creep up, affordability is definitely there. >> it is. but anyone who has already thought about buying is house has already bought a house.

you have household formation rate in the u.s. about 1.2 million people, population growth of about1.5%. so it's going to take a few years to absorb the shadow inventory. everything just tells me that when you see median home co inc home prices, they should be parallel. >> you and i have had many conversations about this macro world you're describing, way too much debt. what are you doing to play that or are you not even playing that? >> in our portfolio, we actually own what we call event-driven situations in either credit or equity and the way that we hedge our kind of the corpus of our portfolio is the model dramat dramatically misprices option ality. so there is enormous convexity in various areas of the world. and we can spend just a small

amount of capital and have enormous convex positions. and i believe it's all in japan. >> but at the end of the day, i think many people would say this has not been -- even if you were right on this crisis as it's moved along, in europe for example, you have not been in position to profit from it the way you were from having seen subprime coming. it's just not the same. >> right. the opportunity is --s as a fiduciary, if i sit on a public endowment board, i sit on in my at heyman, seeing what we see coming is not to lose the money. >> so where do you put assets not to lose money? gold, real estate? >> you have to own anything that's not nailed down. or anything that is nailed down, i'm sorry. you'll have to own productive assets. you want to own apartments, oil wells, gas wells, anything that has a real asset that's

productive. gold is a surrogate currency. we're not going to head back to any gold standard anytime soon. but should you own it in terms of all these other currencies, the answer is yes. the question is how much of your portfolio should you dedicate to it. 5%, 10%, 30%, i don't know the answer. >> would you feel more constructive if for some reason our congress and president, whomever it may be, came to a deal under which they cut $4 trillion in the next ten years? >> i would. i'd love that utopia to show up. >> utopia. >> yeah. it's not going to happen. i've taken a pencil to the cbo budget as a nonpartisan third party and i can't fix it. as an accountant if you can't fix it, i have no idea how a politician could fix it. >> i think we'll leave it on that upbeat note. you can't be too down beat here. it's so beautiful. kyle, thanks as always. back to you guys. >> david, good stuff. david has quite the guest load

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wednesday edition of squawk on the tweet. bald men have the advantage? business according to the journal today. sourcing a recent study by wharton school. what do the bald bosses know that we don't? they know that spending less time on hair means more time on running the business. got it. dan writes with vanity no longer an issue, bald men can focus on content and outcome versus image. i think these guys are serious. john writes the sun does increase knowledge. and then bret writes they're

successful because they spend less time looking in the mirror. four men, presumably all bald. >> maybe. >> could be. >> and of course mark zuckerberg wears the same thing every day. what's coming up tonight? >> tipping the bald theme, we have our own powerful bald man on. neel kashkari. >> segue. >> we also have john taylor to talk about the debates. and why it might be time to sell gold. >> see you at 5:00. let's get to what you might have missed earlier on this morning. welcome to hour three of "squawk on the street." here's what's happening so far. >> what frustrates me is we are not doing more to build infrastructure here in the united states. >> it's happening. we don't need the government to do anything. >> this is a terrific opportunity for us to launch a

global snacking powerhouse. we've got a fabulous roster of market leaders in their respective categories. we have a very strong geographic footprint. >> i look at things like housing come being bacing back. especially if it is foreign auto companies taking the lion's share, i come back and say don't be confused, the adp has a false tale. >> you have more draw in a shma than i've had in a lifetime of living. >> in the last week you've done more shopping than in my lifetime. >> i shop on the edge. >> it really boils down to would you go joint and several with your extended family? >> extended, maybe not. >> so imagine 17 nations that have basically been fighting for the last 200 years all of a sudden agreeing to seed their

sovereignty to germany or a higher power. it boils down to something simple that in my opinion can't happen. >> good wednesday morning. we're live here at post 9 at the new york stock exchange. markets reacting to a bunch of data including adp and mortgage apps, but not a whole lot of directional movement. dow up only 7. s&p up 1 1/2. nasdaq up about 6. netflix the best performing stock on the s&p right now after citi reiterates its buy on the company following a consumer survey that indicates improving customer satisfaction and rising competitive position. metro pcs and leap wireless two of the wig losers following news pcs will merge with leap. let's get a look at the road match. the president and mitt romney facing off tonight in denver for the first presidential debate. we'll have a review of what will be covered and which candidate is likely to come out on top.

plus lifelock making its trading debut. the stock trading down as much as 3%. ceo will join us live in a few moments. and silicon valley may be experiencing huge success, but the rest of california is struggling. find out why tech and social media might not be the economic engines the golden state needs. and the startup that could help you cut your cell phone bill in half. freedom pop ceo joins us. all that and more in the next hour. we'll start with kraft, though. the nasdaq investigating potentially erroneous trades today. want to send to bertha coombss for more on what happened. >> yeah, very interesting debut today for kraft. trading as two separate companies. officially yesterday kraft spinning into two separate divisions. mondelez which controls all of

the snack foods an kraft foods which is the grocery arm. but at the open of trade today, take a look at that chart with kraft foods, it still shows a spike. very unusual spike. the stock yesterday closing at about 45 and change. opening a little higher than that today. and then spiking up to $58.54. nasdaq now canceling trades that traded above $47.82ed that were executed right at the open between 9:30 and 9:31. didn't exactly impact mondelez, the snack food side which includes or i donoreos. but mondelez has been trading lower. so you wonder whether the confusion may have sparked a little bit of sentiment there. but not a debut without some glitches today. >> certainly anything that happens at the nasdaq regarding trades gets a little bit extra attention ever since facebook in the spring. that t thanks a lot. moving on to politics, president and mitt romney going head to

head tonight in the mile high city. john harwood is there live in denver with more on what to expect. john, i know you've written extensively over the past few days about the degree to which the race is changed by debates like this. but given that, what is your sense going into tonight? >> i'll get to that in a second, but i first -- the conversation you were having about hair, did i understand you you guys to say that i'm doomed by this gray stuff up here? >> nothing personal. you can put me in the same club. we just have too much hair on our head. >> more thing to worry about. the race is changing. we've seen that in our new polls out today. romney's pulled a little closer. down three points nationally. almost even in florida, down one. almost even in virginia, down two. still down eight in ohio. but it could change further as a result of this debate. debates are the one moment where

both are side by side. want to run through some issues. on the issue of taxes, mitt romney has proposed a 20% across the both tax cut that he says will not increase the deficit and will not shift the burden to middle income taxpayers. yesterday in a radio interview he began to outline how he might pay for that, said he would limit tax deductions for families to $17,000. that is a step toward specificity, but barack obama can go after him on that. by the same token, romney can go after obama because obama's talked about reducing the corporate rate to 28%, but he hasn't specified how he'd pay for it. and then you have the issue of jobs. romney talks about the job record on net from the beginning of president obama's term. and if you do that, it's just about even. maybe a few jobs in the positive

territory. but barack obama talks about what's happened since early 2010 since the turnaround started. they'll clash on that. on medicare, the big entitlement spending issue that threatens the bunch the long term. mitt romney's proposed with paul ryan an ambitious reformation of the program that would go to voucher, but he hasn't said what the level of the voucher would be or the growth rate in the voucher. if you don't specify that, you can't specify what your savings will be or the impact on consumers. and finally president obama last year in the grand bargain talks with house speaker boehner talked about more ambitious proposals than medicare than he's advocated so far like raising the eligibility age from 65 to 67. hasn't said a word about that in the election campaign so far. you can expect the two to clash on that issue, as well. >> john, i know you've looked at some poll numbers from the journal and nbc news. maybe a slight tightening on a national level. but certainly in some important states like ohio, the president continues to lead. i know you've said the romney strategists believe they need ohio. if it's mathematically possible

to win without it, why do they still believe they need it? >> well, because if you don't win ohio, you're probably not going to win, say, wisconsin, which is another mid western state, paul ryan's on the ticket, that moves in similar ways to the state of ohio. it's hard to piece together especially given the overwhelming dominance by the president of the hispanic vote, states like colorado where we are right now, or nevada. so ohio may be a better shot for mitt romney. as i mentioned, i was talking to a romney strategist the other day and said, well, you're getting closer in florida, but you're still far behind in ohio. and his answer was we need both of them. >> yeah, in some ways maybe tonight's aimed at an economically challenged woman in ohio as someone wrote earlier in the week. john, we'll see you tonight of course. do not miss coverage of the

president shpresidential debate. let's get to rick santelli. >> actually it's proven to bere. let's get to rick santelli. >> actually it's proven to bedet presidential debate. let's get to rick santelli. >> actually it's proven to be presidential debate. let's get to rick santelli. >> actually it's proven to bepr. let's get to rick santelli. >> actually it's proven to be a perfect segue. because in the end, whether you believe polls or not, it's exactly what i'm going to talk about regarding data. polls are basically surveys. do people actually guarantee they'll vote the way they're polled? of course not. so survey says is the topic today. and trust me, if you want quantitative number data, and you also you have al you have t look up at the boards. but let's think about recent data. some of the recent data that we've had that we've seen the most improvement was like today. nonmanufacturing ism, improved markedly. the chicago purchasing manager, as well. national purchasing numbers, consumer confidence, michigan confidence. these are basically qualitative data points meaning they're

expressed by opinion, survey, questionnaires. and believe me, i'm oversimplifying a bit. and that has improved. if we look at quantitative data as i said, it would be the wo boards, things like today's adp number, where you're measuring jobs. you use a measurement. or durable goods orders. jobs numbers. and those have been a bit lacking. now, here's where the mushy factors come in. what you do with some of these data points, like the qualitative data, like ism surveys, starts to get quantitative because they take those respondents and their opinions and their questions and their answers and they use difusion. but the other issue is on quantitative data, there's also a bit of mushiness. seasonal adjustments make them mushy. there's a lot of issues regarding personalizing. who exactly decides the

parameters of seasonal adjustments. there's a human factor there. but in the end, the positives and negatives can go both directions. qualitative data might be a little softer, less mathematical, maybe not as dependable, but it's always earlier whereas the squaunt at a time difference tends to be older because of the compiling nature of all the math involved. so which is right, you'll have to decide. but from where i sit, the quantitative data and the qualitative data are diverging. >> all right, rick santelli. let's get a market flash from courtn courtney reagan. >> shares of walgreen's under pressure. the drug store reporting its comp store sales a day before when many of the retailers will report them very disappointing. down more than 11% and it seems that most of the issue is coming with the prescriptions actually, not the front end of the store. they decreased by 10.3% of that

11.1%. back to you. meantime the company responsible for locking down your personal information is hoping to lock down profits, too. the stock trading in the red on the day of it nysc debut. we'll talk to the ceo. these markets can be as unpredictable as the weather, so don't get caught in the rain without being prepared. one way to do that, carry an umbrella. now is your chance to win a stylish cnbc one signed by the "squawk on the street" gang. if you can guess friday's nonfarm jobs number, it's all yours. tweet your guess to our new twitter handle, squawk street, and don't forget the #nail the number. oh, yeah, you have to be at least 18 years of age to enter. sorry, kid. for all the official rules and

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lifelock began trading today unexercise tder the symbol lock. $9 a share. shares of course as we take a look down a little temperature

todd, congratulations. welcome to the house. i'll start by asking what happened with the pricing. >> we wanted to make sure we have the right folks who understand our thesis, that we'll go out there and proactively protect consumers from the number one consumer complaint of identity theft for the past 12 years in a row. it's a moment in time. all we have to do now is go execute and i love that because we've done it for 29 consecutive quarters. so i'm okay being held to just go deliver now. >> quarterly i saw a statistic this morning out of the past ten four have been operating profit. >> it has been very positive. we're very confident. we have a very predictable model. and it is a recurring revenue subscriber base of over 2.3 million consumers and growing. we're seeing all the right

trends. and our retention rates. as we get new marketing mediums and others. >> that may be part of the concern, the cost of getting that word out. the cost of marketing. we talk about netflix and the burden of keeping the sub base up and growing because it costs money to get people to join into stick with you. >> the key difference is once we locked the most comprehensive by also protecting your banking accounts, we have seen a third of our new enrollments take our premium service which has a retail price of $25 a month. so we've seen a significant climb in life time value, which means our ability to go spend those dollars and see that slight increase in the cost of acquisition, we're getting a phenomenal return on that investment in that growing life

time value, growing reextension rate. >> i see this number 11.6 million adults in the u.s. victims of identity theft last year alone. so if you've got a base of two and there's 11 people to whom this is actually happening, how big can the sub base get? >> there's 300 million people in the u.s. with a social security number and it doesn't matter your age, gender, credit score. everyone is susceptible to being a victim. so as we really focus on those two-thirds of the adult population who have said in market research i'm scared about this problem, we really see somewhere in the neighborhood of 78 million addressable market. we're going to go out there, educate them to what's there, the choices they've made before about credit monitoring that are very limited in their scope. reactionary. we'll tell you days or weeks later after there's been an account open. we deem that as a home alarm system that will tell you one see in your house, you should look around. we'll educate those folks and we

see tremendous addressable market for people hungry for a solution that will be pro active and back it up with a guarantee. >> you use yourself as a spo spokesperson, a billboard, a campaign that basically challenged people to hack your own information. you gave your social security code. was that a good move? >> well, in fact ironically, it was with cnbc that i first attempted to give out that social security number. they actually shut me down in that interview. but it was really -- i don't regret it because it brought awareness to the fact we all give our social security number out to every employer, doctor, dentist, insurance, school. the list goes on and on. and that's what i was trying to bring awareness to. you give it out. what are you doing to protect it. now of course the challenge was i regret that at those times we were just credit related focus like the credit related monitoring services. so i didn't say pay day loans or wireless accounts.

so all you had to do was surf the web and my social security number was everywhere. we cover those now. we see those pay day loans and the wireless accounts. and even at the end of the day, we have one of the world's greatest member services organizations. they handled my problem just like they do for any of our lifelock members and i was never out of time or money. so i certainly got plenty of attention for it, but most of it was good. >> todd, congratulations again. we'll keep a close high on lock. thanks for coming by. when we come back, high frequency traders may have found another way to cheat the system. santelli will tell us about that. and a start up that's planning to give every american the chance to get online for free. the ceo of freedom pop will join us live. when you take a closer. ...at the best schools in the world... ...you see they all have something very interesting in common. they have teachers... ...with a deeper knowledge of their subjects. as a result, their students achieve at a higher level.

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what a day yesterday to talk about high frequency trade. rick santelli will cover that a little bit more. >> and we have a great guest for

this topic. analyst from tab group, welcome. >> good to be here. >> i've had an issue with this. we are not when we talk about -- what we're talking about specifically is how algorithms and hft traders, how they deal with numbers like ism. but the issue isn't necessarily that they get anything before 10:00 eastern. it's the distribution afterwards. maybe you can explain this severally to our viewers. >> so there's a couple of issues. number one, there aren't a lot of standards around how these economic indicators -- >> like i sichsm. >> like ism. there are a couple hundred around the world that traders are honing in on to try to develop training strategies. >> and edges. >> and edges. i'm getting to that. but there isn't a standard no how you set up what's known as an embargo room, where the data comes out, a story is written

and when you hit the 8:30 or 10:00, the horses are all supposed to leave the gates at the same time. so that's the first combination of issues is that they're supposed to leave at the same time, but because there aren't standards between ism or bls or michigan or chicago and many, many others, sometimes there may be inadvertent, you know, inequalities or inefficiencies that need to be looked at. but let's just say they leave the gate at the same time. then you're off into proprietary processing where you can gain an edge. >> this is where i get lost. so 10:00 eastern, ism is released, all the horses are exactly released at the same time. but it still can be gain. go on. >> well, look, so you're buying the data from one of those news bureaus. so they are charging a premium

for these services and these products. so they want to be the fastest. and so they're working on making sure that their computer is closest to wherever the data comes out, that their line is the fastest, that their algorithm process is -- >> so when we did a hit, you're saying the horses leave at the same time, but whose data gets in the computer and gets processed, that's where the speed issue is. in other words, these little crum crumbs have to come from somewhere. is there a victim here? >> let's go back a tech and i had decade or two or three -- >> we have a hard wrap, but basically what paul will go into next time we have him is if the crumbs are small nowdecade or t >> we have a hard wrap, but basically what paul will go into next time we have him is if the crumbs are small now, spread was wider so retail customers are better. i promise we'll have paul back.

>> let's hope it's not worse than it is today. still to come, we're assessing the unusual opening made in kraft and if that could be a red flag over at the nasdaq. plus europe wrapping up its trading day in a few moments. what that might mean for us. gecko (clearing throat) thank you, mr. speaker, uh, members of congress. in celebration of over 75 years of our government employees insurance company, or geico...as most of you know it. ...i propose savings for everyone! i'm talking hundreds here... and furthermore.. newcaster: breaking news. the gecko is demanding free pudding. and political parties that are actual parties! with cake! and presents! ah, that was good. too bad nobody could hear me. geico. fifteen minutes could save you fifteen percent or more on car insurance. heartburn symptoms causedelieve by acid reflux disease. osteoporosis-related bone fractures and low magnesium levels have been seen with nexium. possible side effects include headache, diarrhea, and abdominal pain. other serious stomach conditions may still exist. talk tur doctor about nexium.

we're still looking at eurozone pmis and that will affect trading in europe today. >> no question that you're not

going to get recovery through europe. some ticked up, but still poor. europe is in recession and not growing. let's have a look at the close. there is very much wait and see mode in europe. we're looking for the next catalyst. tomorrow the ecb meeting and then the big payrolls number here in the united states on friday. and still as regards spain and the application for a bailout. worth mentioning even as we speak, the european banking authority coming through with the details of its final report on the degree to which there had to be extra thick capital buffers for the european banks. they said that back in 2011. from what we're getting on the website now, there is an indication that they will as we thought have to keep those in place. tier one capital of 9% of their risk weighted assets. you'll see the bank regulators publish that detail across europe. so that's what we're waiting for at the moment. no wonder perhaps they have to keep the buffer it given the imf

said the crisis could last another ten years. what's also interesting on the session today is this push back that you're getting from southern europe, the president of cypress, small tiny island, has rejected the bailout that's on the table. he says the knee owe liberal method of dealing with the crisis is now dead. and he means the angelo american version. he's also suggesting that it is insulting to suggest to southern europeans are too laid back when it comes to dealing with the crisis. i mention it because obviously we're waiting for the spanish and it's an indication of the degree to which they may be getting a better deal out of europe as they push back on what's on the table. we had some analysis from citigroup today suggesting -- standard chartered, forgive me, suggests they might do a bailout. i'll leave it there. sharon epperson is at the my next as we start to talk about

what might be a warm winter. >> yes, it might be a warm winter, that will certainly have an impact on energy prices and energy really is the story in the commodities market today. look at the $3 slide in crude oil and a lot has to do with the demand outlook. traders are focused on what is coming out of asia. news about china's pmi services data was weak then expected, but really it's what the asian development bank had to say about emerging asian nations and the gdp growth forecast that they have for them. they rationed down their expectations for 2012 and 2013. this is supposed to be the engine of growth, the engine of demand for crude oil and for other industrial commodities. if it's not there, what's going to happen, we'll see perhaps an even further slide here in oil prices. we also got data from the u.s. energy department and that also was a bit of a surprise in terms of the supply side. but in terms of demand, continuing to see anemic demand in terms of gasoline demand,

down 2.5% versus a year ago. and this is already as we're getting the slide to the winter grade of gasoline. so since that rollover, we have seen a steady slide in gasoline futures. the one commodity holding steady, it's gold. a lot of traders waiting for central bank action or at least statements and what's going to come out of the ecb, the boe in the next day or so. also some minutes from the fed coming out, that could have an impact on the gold trade. 1780 for gold and holding right here. back to you. >> sharon, thank you very much. bob pisani has joined me on post 9. we're talking about those who have said the global economy is slowing dramatically continue to be stymied by data like we saw today. >> of course it makes people crazy. there are signs of clearly slowing global economy. watch china, watch what's going on in europe. and yet the markets keep holding on. and everybody who keeps waiting for this 10% correction which

has been six months now, doesn't happen. once again bring up the charts. this is just the last ten days. remember we saw the big drop when there was concerns about spain deal might be unraveling. riots in madrid. things are more stable now and we're moving back to where we were a couple weeks ago. so plenty of people looking for a 10% correction. my personal thoughts on this, highly possible we could get a 3% to 5% correction just on the lack of news. but then you'll see people coming in and being interested in buying because a lot of people are underperforming and we're reaching towards the end of the year. there's a little desperation in the air on some of that. take a look at major sectors. notice energy and materials are still a little bit on the weak side, so there's still concern out there. i'm not saying it's not there. certainly is. but either side a positive or negative. bertha has been doing a good job covering the kraft story. people ask what's it mean. there are clear rules that have been established and a lot was because of the flash crash.

after the flash crash, all the exchanges adopted essentially uniform standards for canceling trades. all of them follow the same rules. and there's two important things that have to happen. number one, the broker/dealer has to call the place where it's trading and say we think we've made erroneous trades. that's very important. only in rare circumstances can the exchange itself say we're canceling everything. secondly, the stock has to move a certain percentage to be declared erroneous. there's rules that are a little arcane, but in the case of kraft, it's about 5% from where the stock was trading before there were erroneous trades. so take a look. kraft was trading down here at 45, went up to about 47 and change. and then suddenly it hit 50. all of a sudden. so you'll notice they canceled most of the trades above $47.82. that's about the 5% ratio. so once the stock went from $47 to $50, and it got as high as

$48 and change, you can't see this on mehere, but they cancel everything. so why did it happen? it might have have to do with kraft was being spun off by some things, but more importantly the rules worked here. nasdaq very quickly announced what had been canceled. i'd like to know why, but the rules did work. >> all right, thank you. joining us on the phone by the way for more on kraft's unusual open is scott nations, president of nations shares. scott, good morning to you. >> hi, carl. >> first off, what is your take on this given the limited amount of information we have? >> first of all, it's obviously tough if you're a kraft shareholder. while some of these trades have been canceled, there was quite a while where you didn't know what should you you should do.

but i really think it's a black eye for the exchanges. looking through my data, i see that these trades, these trades in question, happened on at least eight different platforms, eight different exchanges. all of which are somehow responsible for this. so in why nogeneral, it's a bla as much for the exchanges. because this is a function of technology and you have to wonder if part of the problem is technology, why can't part of the solution be technology and today in kraft, it was quite a ride. fortunately went to the up side, but what would have happened in the broad market if we'd had this ride to the down side as we saw in the flash crash. >> and we should be very delicate because we're talking about one instance which we do not have perfect information. on the other happened, we have had the sec holding very broad public discussions this week.

mash could y mark cuban on our air talking about technology in general, that some argue have moved beyond the point of marginal utility, right? i mean, they're no longer providing the benefit ofly liquidity without some risk appended to it. >> i think that's the key. it no longer is providing utility. partly because these sorts of traders don't have any responsibility to the market. and you had rick on earlier. rick and i both started in the trading pets where you had a responsibility. the broker would tap you on the shoulder and say i need you to make me a market. and there were certainly times where things were really flying around and you would have been happy to have not had to make that market. but you had a responsibility. part of the problem now is that too many market participants don't have any responsibility other than to pay the exchange extra fees for some of these goofy order types which is also part of the problem. so i think the fact that people

can simply ping these markets are and if you look at the data in kraft, that's how it got up to $58.54 or $13 above where it opened. some of these goofy order types are also part of the problem. >> let me ask you before we let you go, in all honesty, have clients said to you market looks great, wish i had been a part of it, but i don't trust the algos, i don't trust the computers, or is this something we're only discussing on the street among banks and the financial media? >> no, i think retail investors were already worried and confused. and when they see stuff like this, they simply throw up their hands. they think they can't figure out the market or that the market is set against them and they are somehow disadvantaged. we saw a whole generation of people who didn't trust the stock market in the 1930s and 40s and i think we're setting up a generation of people who don't trust the markets right now.

>> scott, we'll keep an eye on the story at large. thanks for coming to the phone. want to get another market flash from courtney reagan back at hq. >> shares of hewlett-packard have fallen precipitously. street account is noting that it mentioned its improvement will take longer than expected. this again mentioned in an analyst meeting according to street account. we can see there is action in the shares down by 3%. >> it will be an important day for meg whitman and hp. as we've mentioned, the president and mitt romney facing off tonight. there are a lot of important issues on hand. one of the most talked about is social security. >> social security works as an immediate transfer of money from workers today to retirees today. and that works out just fine when enough money is being taken out of the paychecks of enough people to cover the checks going

to retirees. but by 2014, aging baby boomers create a problem. too many retirees will need checks and not enough workers will be there to cover them. in the 1950s, there were nine workers for every retire re. today it's about 3:1. and by 2030, only 2:1.re. today it's about 3:1. and by 2030, only 2:1.e. today it's about 3:1. and by 2030, only 2:1.. today it's about 3:1. and by 2030, only 2:1. it accumulates over $2.6 trillion. but since the beginning of the program, uncle sam has been helping itself to that cash and spending it like it was his own money. while he filled the jar with ious. so in 2014 when more retirees need checks than ever before, the only place to get them will be from a guy who is already deeply in debt. or by cutting benefits or raising taxes. >> that's steve liesman with a nice piece of tape there. don't forget our coverage of tonight's presidential debate begins at 8:00 p.m. eastern

right here on cnbc. yet another city in northern california is going broke. find out why silicon valley may not be the economic engine and job creator that everyone thinks it is. a lot more on california's state of pain next. and then later, what if you could get data on your cell phone to check the web, update your facebook page for nearly free? we we will tell you how. mike rowe here at a ford dealer with a little q&a for fiona. tell me fiona, who's having a big tire event? your ford dealer. who has 11 major brands to choose from? your ford dealer. who's offering a rebate? your ford dealer. who has the low price tire guarantee... affording peace of mind to anyone who might be in the market for a new set of tires? your ford dealer. i'm beginning to sense a pattern. buy four select tires, get a $60 rebate. use the ford service credit credit card, get $60 more. that's up to $120. where did you get that sweater vest? your ford dealer.

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coming up, we'll certainly have much more on what happened with kraft this morning. what it all means especially to investor confidence. we had a big show yesterday, mark cuban, very outspoken. so we'll continue the discussion there. much more on where the markets are going from here. and is a perma bear about to turn bullish. and we'll be all over apple. >> the cuban stuff was unbelievable yesterday. can't wait. yet another california city may declare a fiscal emergency this week. atwater could become california's fourth city to seek bankruptcy protection. jane wells is live in l.a. with more on that. >> stockton, san bernardino, atwater could join them as a fiscal emergency is considered a

first step towards chapter 9. they'll vote tonight on whether to declare that emergency and layoff a fourth of its workforce as the town of 28,000 tries to deal with $95 million of outstanding debt and a deficit of over 3 million bucks. we just happened to be in atwater a couple weeks ago at an egg operation. it's more of a rural part of northern california. and other than san bernardino, most cities in trouble are in the north. ironic as the north also has this california economic engine in silicon valley. but what's good for tech isn't necessarily good for everyone else. >> it's not spilling over like it did in previous boons. because social media don't create a lot of jobs and they don't create any blue collar jobs basically. so parts of the northern california economy that are hurting, oakland or stockton, what's going on in silicon

valley might as well be happening on another planet. >> here is a very important point. atwater's mayor is saying she plans to keep making debt payments. this is something that a lot of other payments like stockton and san bernardino have stopped bond holders beware, you are no longer bulletproof. she's busy selling. >> we just got a new account in. we immediately when the account hit sold the bonds we knew was in peril. we've sold some fairfield bonds. so the answer is yes, we are selling everything that we think is even moderately tainted or in trouble. >> compton is next. and while northern california may be heading into these emergencies first, plenty of cities in so cal are in the congo line. she is buying things that you can understand and which pitch and obligations are not the main 800 pound gorilla. and not all news is bad. s&p just raised l.a. county's

credit credit to go aa from aa minus. that is if you believe such things. back to you. >> i like that congo line imagery. that's a good one. when we come back, is your cell phone bill eating up your budget? a new company promises to save you hundreds of dollars a year by making data free. that's right. we'll get all the details on freedom pop from the company ceo next. for 30 some years at manyendent

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and get 3 years interest-free financing on tempur-pedic. but hurry, sleep train's inventory clearance sale ends columbus day. ♪ your ticket to a better night's sleep ♪ smartphone revolution has ushered in an era of sky high cell phone bills. free pop launched a wireless data service that promises to save customers hundreds of dollars a year.d pop launched a data service that promises to save customers hundreds of dollars a year.o pop launched a data service that promises to save customers hundreds of

dollars a year.m pop launched a data service that promises to save customers hundreds of dollars a year. the ceo joins us from los angeles. good morning to you. >> good to see you. >> i'll start with the promise of free data. what's the catch? >> no catch. no gimmicks. we're giving every user 500 mega bits of free data a month at a minimum. they can earn more and add friends to freedom pop and earn 10 megs per friend. >> essentially they put down a fully refundable did deposit it says for the modem. as he said, 500 megabytes a month free. and then i guess $10 for each gig over that. that's not a lot of data, i wonder if you think the free part at least might lemt your audience. >> actually 70% of americans actually use less than 500 me megabytes on month on their cell phone. so from the broader market, it's sufficient. but data usage is going up. it's exploding. and the reality is our prices, if you want to buy 5 gigs, our

prices are 30% cheaper than verizon orat&t. and there's no contract fees and no fluff. >> nationally you with 4 glt. why do this? i know you have some philosophical reasons behind it, you think the internet is free, it's a right. but history is littered with companies who tried to make a living giving away things for free. >> you touched on it earlier. you have an entry in the u.s. specifically where you have companies operating a duopoly, margins are sky high in the u.s. especially versus european companies. we're trying to disrupt that market. there's failures in the past, but if you look at the model we're pursuing, it's been tried and tested on the web. everything from skype with voice

and we have a team that can pull it off. >> skype's. your start up is backed by one of the founders of skype. do you expect a lot of response to the areas of data in which you actually will charge? >> so just like skype where 90% of the user base using skype for free, there is a percent of that user base that actually pays for skype out or international calls. we see a similar model. we expect a large majority of our year base not to pay us a penny, but business travelers, those who use more data, will pay us and we'll sell services, too, value added services that we think consumers can use to enhance their internet experience. >> there was a piece in the journal not too long ago looking at the percentage of household income, right? in america, that is going to their phone bill. and it's reaching unbelievable proportions to the extent that even the carriers they suspect

are beginning to wonder maybe we've tested the limits of the fees we can charge. do you think the industry is up against that wall? >> absolutely. i think the margins especially in the u.s. are enormous. consumers are getting pillaged. we're looking to disrupt that. >> and then finally on this modem, $49 for the deposit for the ubs schls $89, do you get y money back? >> if you want to cancel your service, you get the gs bao dep back. every american should have one of these devices. >> talk about throwing a fire bomb in the middle of the have i. we'll see how it plays out. steven, appreciate your time. >> likewise. keep those tweets coming.

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squawk on the tweet for a wednesday. you might have read that bald men apparently have the advantage in business. story in the "wall street journal" today sourcing a recent study by the university of pennsylvania says bald men are taller, perception is that they're stronger, more dominant, more masculine. what do bald bosses know that we don't? we got so many responses. swrim wri jim writes real men don't waste hormones trying to grow hair. joe writes it's not the baldness that causes power, power that causes baldness. and they now how cold it is at the top. thanks for all your responses. the t-mobile ceo will be on "power lunch" today talking about the big deal with metro pcs. and meg whitman with us tomorrow in